Mind the gap: where the insurers fit in the Government’s fraud strategy

The Government’s strategy outlines various ways in which it is committed to combatting fraud, such as public awareness campaigns, cross-industry data collection and knowledge-sharing and proactive policing. The financial services sector is identified as a delivery partner, playing a “critical role” by working with law enforcement, regulators and the Government to share intelligence and enhance customer protections. Insurance, however, is not singled out for bespoke interventions, dedicated charters, or sector-specific action plans in the way that banking, telecommunications, and technology are.

According to the Association of British Insurers approximately £1.16 billion in fraudulent general insurance claims were detected in 2024, showing the sheer scale of the issue and need for sector-specific initiatives. One of the few explicit references to the sector falls under the Government’s enhancement of law enforcement investigation capabilities. The strategy proposes new “business-funded units” and cites the Insurance Fraud Enforcement Department (IFED) as an example of an existing model for these new units to be based off.

The strategy does not specifically address the scale of fake insurance on technology platforms. While the fraudulent advertising duties under the Online Safety Act 2023 will apply generically to paid-for fraudulent adverts, there is no sector-specific mechanism or duty directed at verifying whether an entity advertising an insurance product is authorised by the FCA to do so. There is also an absence of any proposal for platform-level verification of insurance advertisers, which stands in contrast to the robust verification and accountability measures contemplated for telecommunications providers, for example.

The Government’s approach is commendable in its breadth and commitment to cross-sector collaboration but appears underdeveloped in its treatment of insurance-specific fraud risks. Whilst it is certainly a step in the right direction, the need for tailored intervention tools for the industry remains.